Dow rose 88, advancers over decliners better than 3-2 & NAZ gained all of 4. The MLP index went up in the 222s & the REIT index added 1 to the 417s. Junk bond funds fluctuated & Treasuries were purchased. Oil went over 55 (more below) & gold climbed 6 to 1496, nearing the psychologically important 1500 level.
AMJ (Alerian MLP Index tracking fund)
Stocks opened little changed after 2 industrial heavyweights released their quarterly results. On the commodities front, West Texas Intermediate crude oil was trading down 1.3% near $53.80 a barrel ahead of the Energy Information Administration's weekly inventory report. Stockpiles are expected to have risen by nearly 2.5M barrels. Treasuries were higher, pushing the 10-year yield down 2.6 basis points at 1.742%.
Boeing (BA), a Dow stock, reported a more than 50% slide in Q3 profit, worse than expected, as the company struggles to recover from 2 fatal crashes of its top-selling 737 Max aircraft. The aerospace giant's revenue, which slid 20%, wasn't as bad as feared & would have been significantly worse without the company's strong defense & space sales. BA also stuck to an optimistic forecast for when its 737 Max aircraft will begin flying again, saying that it assumes “regulatory approval of the 737 MAX return to service begins in the fourth quarter of 2019.” While some investors may have been expecting BA to cut production of the 737 Max further, the company maintained its production rate of 42 airplanes per month. The company also expects to “gradually increase” the 737 Max production rate to 57 per month by the end of next year. EPS was $1.45 vs $2.09 expected & revenue was $19.98B vs $19.67B expected. BA did not provide an update to its full year forecast, which it suspended earlier this year. Revenue dropped 21% from the same period last year, while Q3 operating cash flow was negative $2.4B. The commercial airplane unit brought in $8.3B in revenue. But the division's operating profit continued to fall, tallying a $40M loss for the qtr, down from a $2B profit a year earlier. BA business delivered 62 airplanes during tQ3. BA said it will decrease its monthly production of 737 Dreamliner aircraft to 12 per month by the end of next year, saying “the current global trade environment” will keep the rate at that level thru 2022. The stock was off pennies.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing shares rise despite big earnings miss
Caterpillar (CAT), another Dow stock, shares plunged after the company slashed its full-year outlook & posted disappointing Q3. The company blamed the dismal results on a reduction in inventories from dealers. Exes said in a press release this weakness could persist due to “global economic uncertainty” resulting from “trade tensions and other factors.” EPS was $2.66 in Q3, versus the estimate of $2.88. Revenue came in at $12.758B, while expectations were for revenue of $13.572B. The company also lowered its full-year EPS forecast to $10.59-11.09 from $12.06-13.06. Analysts expected $11.70. The company said it now expects Q4 demand to be flat, dragging down by a $900M reduction in inventories. The company said dealers decreased inventories by about $400M in Q3. In the same period last year, they increased inventories by $800M. “Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations,” said CEO Jim Umpleby. Sales in Asia-Pacific declined 13% in Q3 mainly because of the lower demand in China. The stock snot up 11.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar reports earnings that badly miss the Street, cuts forecast again
The Energy Information Administration (EIA) reported that US crude supplies fell for the first time in 6 weeks, down 1.7M barrels for last. Crude supplies were forecast to increase by 4.7M barrels. The American Petroleum Institute yesterday reported a rise of 4.45M barrels, according to sources. The EIA data showed supply declines of 3.1M barrels for gasoline & 2.7M barrels for distillates. The forecast called for supply decreases of 2M barrels for gasoline & 3M barrels for distillates. Dec West Texas Intermediate crude added 53¢ (1%) to $55.01 a barrel, up from $54.55 before the supply data.
News on the trade front is quiet & investor attention is on earnings which are coming in mixed. The Dow is 500 below its recent record high.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 54.50 | +0.02 | +0.0% |
| GC=F | Gold | 1,497.70 | +10.20 | +0.7% |
Stocks opened little changed after 2 industrial heavyweights released their quarterly results. On the commodities front, West Texas Intermediate crude oil was trading down 1.3% near $53.80 a barrel ahead of the Energy Information Administration's weekly inventory report. Stockpiles are expected to have risen by nearly 2.5M barrels. Treasuries were higher, pushing the 10-year yield down 2.6 basis points at 1.742%.
Stocks little changed after Dow heavyweights Boeing, Caterpillar report
Boeing (BA), a Dow stock, reported a more than 50% slide in Q3 profit, worse than expected, as the company struggles to recover from 2 fatal crashes of its top-selling 737 Max aircraft. The aerospace giant's revenue, which slid 20%, wasn't as bad as feared & would have been significantly worse without the company's strong defense & space sales. BA also stuck to an optimistic forecast for when its 737 Max aircraft will begin flying again, saying that it assumes “regulatory approval of the 737 MAX return to service begins in the fourth quarter of 2019.” While some investors may have been expecting BA to cut production of the 737 Max further, the company maintained its production rate of 42 airplanes per month. The company also expects to “gradually increase” the 737 Max production rate to 57 per month by the end of next year. EPS was $1.45 vs $2.09 expected & revenue was $19.98B vs $19.67B expected. BA did not provide an update to its full year forecast, which it suspended earlier this year. Revenue dropped 21% from the same period last year, while Q3 operating cash flow was negative $2.4B. The commercial airplane unit brought in $8.3B in revenue. But the division's operating profit continued to fall, tallying a $40M loss for the qtr, down from a $2B profit a year earlier. BA business delivered 62 airplanes during tQ3. BA said it will decrease its monthly production of 737 Dreamliner aircraft to 12 per month by the end of next year, saying “the current global trade environment” will keep the rate at that level thru 2022. The stock was off pennies.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing shares rise despite big earnings miss
Caterpillar (CAT), another Dow stock, shares plunged after the company slashed its full-year outlook & posted disappointing Q3. The company blamed the dismal results on a reduction in inventories from dealers. Exes said in a press release this weakness could persist due to “global economic uncertainty” resulting from “trade tensions and other factors.” EPS was $2.66 in Q3, versus the estimate of $2.88. Revenue came in at $12.758B, while expectations were for revenue of $13.572B. The company also lowered its full-year EPS forecast to $10.59-11.09 from $12.06-13.06. Analysts expected $11.70. The company said it now expects Q4 demand to be flat, dragging down by a $900M reduction in inventories. The company said dealers decreased inventories by about $400M in Q3. In the same period last year, they increased inventories by $800M. “Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations,” said CEO Jim Umpleby. Sales in Asia-Pacific declined 13% in Q3 mainly because of the lower demand in China. The stock snot up 11.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar reports earnings that badly miss the Street, cuts forecast again
The Energy Information Administration (EIA) reported that US crude supplies fell for the first time in 6 weeks, down 1.7M barrels for last. Crude supplies were forecast to increase by 4.7M barrels. The American Petroleum Institute yesterday reported a rise of 4.45M barrels, according to sources. The EIA data showed supply declines of 3.1M barrels for gasoline & 2.7M barrels for distillates. The forecast called for supply decreases of 2M barrels for gasoline & 3M barrels for distillates. Dec West Texas Intermediate crude added 53¢ (1%) to $55.01 a barrel, up from $54.55 before the supply data.
EIA reports a surprise decline in U.S. crude-oil supplies, the first in 6 weeks
News on the trade front is quiet & investor attention is on earnings which are coming in mixed. The Dow is 500 below its recent record high.
Dow Jones Industrials
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